Netflix's Q2 Subscriber Guidance Was Well Ahead Of Analyst Expectations

Netflix's Q2 Subscriber Guidance Was Well Ahead Of Analyst Expectations

Netflix's"Stranger Things Netflix

Galeno Paniagua
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21 Abril, 2017, 02:25

Netflix missed slightly on subscriber estimates for its first quarter earnings report as the streaming giant saw shares initially dip but then rise more than 1 percent in after-hours trading on Monday.

Sacred Games, a Netflixoriginal series in India, was also used an example of an global show Netflix is producing that is Hollywood-level quality. However, all bets are off today, as the stock marched onward and downward and seem destined for a close in the $140 range, if not below $140 a share. Finally, Needham & Company LLC upgraded Netflix from a sell rating to a hold rating and upped their target price for the company from $95.00 to $135.00 in a research report on Thursday, March 16th.

Netflix has reported lower than expected subscription growth in the first quarter of 2017, a result it says was driven by delays to flagship content. However, management tried to reassure investors that it's just a matter of timing with their release schedule, and some analysts seem convinced.

Netflix expects to add another 3.2 million subscribers and push its total to 101.95 million during the second quarter, but that could prove to be a conservative figure if current growth trends continue for the company. The business had revenue of $2.64 billion for the quarter, compared to analysts' expectations of $2.64 billion. "It's a good start", the company wrote (PDF) to shareholders at the earnings call for the first quarter of 2017.

"The company is likely to continue to experience quarter-to-quarter volatility, as both the pace of subscriber additions and the path to respectable profitability remains hard to determine", wrote Dougherty analyst Steven Frankel in a research note, maintaining his neutral rating.

The firm had predicted that it would see a growth of 5.2 million subscribers in this quarter, however the streaming firm only managed to gain 4.95 million. New domestic members came in at 1.42 million, versus Wall Street forecasts 1.59 million, and Netflix guidance of 1.5 million.

This post-earnings reaction led NFLX stock to break out of an 18-month consolidation period, marked with the two black parallels.

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